Big Steel's 'moderate' settlement: good news now, bad news later?

The successful conclusion of steel labor negotiations April 14 assures an unparalleled 20 years without a nationwide strike in the industry. But the terms could mean troubles ahead.

Negotiators for the United Steelworkers of America (USW) and nine major companies, bargaining jointly, reached a tentative agreement on terms covering 286,000 of the industry's 450,000 workers. The settlement provides substantial wage and benefits increases, probably about 9 percent a year over three years, in line with Carter administration guidelines. The agreement also offers concessions to steel companies, designed to improve productivity and offset some of the higher costs. Since 1972, steel productivity has crept upward at a rate of about 2 percent a year, while labor costs rose 7.3 percent annually.

The agreement was subject to ratitification by the USW industry conference, made up of local union presidents. Objection to the terms brought out in its deliberations could be a basis for future problems. And steelworkers, feeling the pressures of inflation, grumble about the added money, a reported 60 cents an hour over three years, as economically unrealistic. They will get a 25 -cent-an-hour raise in the first year, 20 cents in the second, and 15 cents more in the third year. These increases will be reinforced by periodic cost-of-living adjustments (COLA).

The raises in the average wage of steelworkers, $11.35 an hour in January, are generally considered moderate. They are a recognition by the union that the industry is in trouble because of heavy competition from abroad, high labor costs, a need for modernizing operations without the capital to do it, and low profit levels.

The tentative settlement makes substantial improvements in the pensions of retired workers, a major issue in the 1980 negotiations. However, to offset some of the cost of higher monthly benefits, the USW reportedly bargained away a cost-of-living raise -- an expected 32 cents an hour -- that would be due in May under the present contracts. This giveaway was a principal point of contention among many of the union leaders, members of the USW industry conference, when they met in Pittsburgh April 15 to consider the proposed settlement. Dissidents talked openly of rank-and-file objections to giving up COLA money and of a need for stronger bargaining "with threats" in the future.

Since 1974, steel negotiations have been conducted under an agreement that, for all practical purposes, bars national strikes.

The no-strike agreement now must be renegotiated. A probability is that it will be; but substantial changes are likely to remove some of the complaints by the rank and file over the lack of militant bargaining.